Increase Customer Value By Using CRM As a Process

Customer Relationship Management [CRM] is not new, however, the CRM technology now available can drive CRM capability into every corner of the organisation. CRM can be defined in terms of either a:

Project - to fulfill a short-term, finite goal. For example, a 60-day promotion to cross-sell a product, or to determine the 90 day utilisation of a service. Projects have a single, defined goal with an end-date, and provide minimal return on investment.
Process - an going, long-term, and broader intiative that provides infrastructure that can be used over and over again for many concurrent projects. CRM processes include acquiring, verifying, cleansing, enhancing, and transforming data and transactions into insight or new knowledge.

CRM projects and processes work together in an iterative fashion. For example, CRM processes are used to provide the strategy and infrastructure that identifies the need for a CRM project, the project is defined, then CRM processes provide the techniques and measurements for executing the project.

The High Cost Of Only Viewing CRM As a Project

Many companies do not have a long-term strategy for CRM. Instead, they see CRM as a technology, a tool that drives campaigns or lowers their sales or marketing expenses. In other words, as a series of projects.

Reframing CRM as a process rather than projects requires an enterprise-wide shift in how a company does business. Rather than investing in CRM tools to support sales and marketing efficiency, or to define customer segments, CRM is about understanding and managing the whole customer relationship, at all touchpoints, and over the lifetime of the customer.

It is an iterative learning environment that teaches an organisation how to improve the way it relates to its customers. Every project or program, reveals wins and losses, what worked and what didn't. A truly intelligent enterprises analyses the why, and applies those learning to in a continuous improvement cycle.

Anything less than this, fails to release the true power of CRM investments and efforts.

Customer relationships don't really develop in the short-term, they are a long term asset, and CRM provides the foundation for building strong relationships with customers.

Why CRM Processes Are More Important

It is important that CRM is ultimately seen as a process, the main reason being, that it creates a different mindset and approach in the organisation.

Too many companies approach CRM as a project, to do specific promotions. However, CRM as a process is about developing relationships-and that means the overall strategy of:

Understanding the customers and their needs
Interacting to gain new knowledge
Assisting in driving new opportunities
Increasing customer confidence, which develops loyalty
Using information to improve individual relationships.

Adopting this process approach better equips the company to develop a holistic view of its customers and how it interacts with customers various channels - sales promotions, service provision, billing, support, marketing communications, direct messages.

The CRM process must integrate ALL interactions with the customer such that the 'whole customer' is recognised, with all their needs and concerns being considered and addressed. Customers very quickly perceive that an organisation is aware of all of their interactions, and are much more likely to develop loyalty through this deeper engagement.

CRM is a long term process, a long-term proposition, that is not time defined. It continues even beyond the time a customer may terminate services with an organisation.

The knowledge gained from customers is continuoulsy cycled into developing new products and services, new support options and new experiences. Thus, it is important to constantly measure CRM investments for effectiveness, and to reinvest knowledge gained back into the ongoing development of the total CRM process. The long-term dividend will be customer loyalty and, increased revenue.

CRM requires patience, discipline, and creativity. Companies practicing CRM-as-process typically achieve very high ROI and success rates.

Changing From CRM Project to CRM Process

Changing any corporate mentality is always challenging, and just as much so in the CRM arena.

CRM Capability Assessment

The first step is a thorough assessment to determine:

How CRM is perceived throughout the organisation
How CRM is used throughout the organisation
Where and how CRM can drive business value

CRM Strategy

Companies need thoroughly understand what they are trying to achieve with CRM and not set expectations too high. CRM is not a quick win miracle cure. It is a series of short and long-term commitments that form an integral part of how an organisation achieves its long-term goals.

Improving long term customer relationships drives increasing customer value and stakeholder value.

CRM capability requires technology, process and people to support a CRM mind-set. This drives a set of CRM strategies with activities based on wanting to develop that iterative, enterprise-wide knowledge, for employees to learn and do and learn more and accomplish higher achievements.

The outcome is based on the value of faster, more flexibile management decisions, and the inherent agility the organisation develops to address changing markets' needs.

Continuous Improvement

CRM as a process is an iterative cycle of small, incremental learnings that build a new customer interaction, into a long term customer value lifecycle.

March 2008

Author: Gail La Grouw - Gail is a corporate performance consultant for Coded-Vision Consulting. She specializes in using business intelligence to drive performance in your business by linking strategy directly to measurable actions.

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